Barclays sells another tranche of African operation

December 4, 2017



The British bank’s stake in Absa’s JSE-listed parent company is now just 14.9%

Barclays, which acquired 56.4% of Absa in 2005 and increased its holding to 62.3% in 2013, announced its intention to divest its African operations in 2016.

Barclays Africa Group said on Friday morning that 1.5% of the shares had been transferred to a broad-based black economic empowerment scheme from its former UK parent, as agreed in June.


Barclays has agreed to sell 7% of its former South African subsidiary to the Public Investment Corporation (PIC) at R136.09 per share, a 14% discount to Barclays Africa Group’s R157.78 closing price on Thursday.


This transaction still needed regulatory approval, Friday’s statement said.


On Thursday evening, S&P Global Ratings issued a statement saying it was cutting its credit rating of five South African banks a notch, as expected following its downgrade of the country’s sovereign rating on Friday night.


Absa has historically benefited from having a UK owner because it inherited Barclays’s credit rating,

whereas its local competitors had their credit ratings capped by SA’s sovereign ratings.


S&P’s statement showed Absa still gets this benefit, with its rating cut to AA- from AA, whereas the other banks were all cut to BB from BB+.


Absa’s holding company Barclays Africa Group had its credit rating cut to BBB+ from A-.






Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER




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